Why Marvel Comics Thinks DIGITAL Is the "New Newsstand"

By Michael Doran November 9, 2011 03:21pm ET

First Look - AVENGING SPIDER-MAN Variant

Digital … digital … digital…

Its all the rage in the world of comic books, yet there is still so much that readers and even close observers of the industry don’t know about what sort of sales impact the distribution channel generates. If judged by how hard the publishers are chasing the market, the answer would be “a darn big one,” but the attention digital distribution gets could also be driven by publishers anticipating how big it could eventually become.

In an interview with Marvel Senior VP of Sales David Gabriel, the Marvel executive told Newsarama their current digital sales equates roughly to that of a “new top 10 retailer”.

While that doesn’t seem like a game-changer, the truth is digital distribution is still in its infancy, and publishers and digital distributors like comiXology are still discovering what works and what doesn’t.

Marvel’s latest test-of-the-digital-waters launches today, as the publisher is offering a free, redeemable code for a digital copy of the debut issue of Zeb Wells and Joe Madureira’s Avenging Spider-Man in the pages of the print comic book itself.

DC may have beaten Marvel to the general idea – they’ve offered a “Digital Combo Pack” of Justice League with a redeemable code since that series debuted in September – but Marvel will point out DC is charging a buck for that, whereas they’re offering it at no-charge (aside from the $3.99 cover price of the issue, that is).

And as you’ll read in the next few moments, Marvel already has plans to expand the concept that they’ll announce over the next 2 days.

In the following interview with Gabriel, we discuss why Marvel thinks digital will feed and not cannibalize comic book stories, why digital comics cost what they do, and why Marvel thinks digital is the “new newsstand.”

Newsarama: David, let's start with a real simple question. A reader goes into his or her local comic book shop, buys a copy of Avenging Spider-Man #1, and gets a redeemable code for a free digital copy of the same issue.

From a layman's perspective, there doesn't seem to be any immediate gain for Marvel since the digital copy is free and the consumer presumably is already a comic book reader who visits local comics shops and read that very same issue already.

So big picture wise, what do you want to happen from there? What long-term consumer action are you looking to encourage/promote?

David Gabriel: This is something we see in many other media, from music to movies, and it's clear customers like not only having a physical copy of their purchases but also a digital copy to load on their mobile devices. We're also always looking for a way to add value to our comics, especially those at the $3.99 price point and this seemed like a great option for everyone.

Fans get more bang for their buck and don't pay an extra cent.

For retailers we've further incentivized the print copy of Avenging Spider-Man #1 and are offering an unparalleled incentive for every code that's redeemed from a book purchased at their stores. One of the unique things about Marvel is that we define “publishing” as a combination of print and digital initiatives — these are both part of how we deliver the best experience to our fans, which includes these kinds of “on the go” offerings to complement our print product.

At the end of the day, our goal is the same with everything we do-grow the market, create new fans and sell more comics.

Nrama: Why did you choose this particular title to launch this program?

Gabriel: Spider-Man is the most popular super hero in the world, so a big new series with two of the top creators in the industry — Zeb Wells and Joe Mad — seemed like the perfect book to launch this initiative. New readers won't be confused or need to know any continuity and for long time readers this is a great addition to the stunning work from Dan Slott each month in Amazing Spider-Man.

Nrama: Would it be safe to say this is a pilot program, which if successful may be expanded?

If consumers and retailers respond positively do this, how widespread might be we see this sort of program six months, or a year from now?

Gabriel: I'll give you one better — I can confirm it's being expanded and you'll see two announcements this week about it.

Nrama: Having written a few press releases and having read thousands more in my time, your announcement about Avenging Spider-Man makes it loud and clear you're promoting this and your digital policy in general as superior to other programs.

So for sake of discussion, how is Marvel's digital policy superior, to say, DC Comics? What are you doing better?

Gabriel: I don't think anyone in this industry or any other embarks on an important initiative without believing they're doing the best they can and learning from their competitors. We have the best Digital Media division in comics, doing things no one else has done — including getting into digital comics before any other major publisher — and constantly redefining the role of digital media in the comic world.

We're also cognizant of the role the comic shop plays in this industry — they're at the heart of everything we do and we make all our moves with their best interests in mind.

Nrama: Okay, with that said, the other takeaway from your announcement is you're promoting this as a program that will benefit retailers of traditional print comic books.

From the press release: "We're also developing a program designed to drive digital customers into brick and mortar comic shops to help increase their business. Bringing the worlds of print and digital together in this way gives the customer a great value and one we're sure will result in even greater sales for retailers."

So can you talk in detail about how Marvel believes the growth of digital has the best interests of retailers in mind? Ho will increase sales of print comics, or at least the health of comic shops in the long-term?

Gabriel: It’s pretty simple. We need a new seeding ground for folks to try out comics, the way the newsstand used to provide us. Once we get people interested in reading and interested and invigorated by the medium it’s really just a few steps for us to train those new readers about the direct market comic shops. As a matter of fact we are going to be testing this theory in the coming weeks with a special, never before attempted digital to print program.

Nrama: Not just you, but DC, and just about every publisher in the digital market consistently promote the idea that digital won’t cannibalize print sales. But brick and mortar retailers of "hard-copy entertainment" have had a tough go of it the last few years. Borders has recently gone out of business and if you've been in a Barnes and Noble lately, their eReader the Nook is clearly a major priority.

Digital delivery is probably not the sole cause of any brick and mortar businesses folding, but it certainly has to be a factor.

Why will comic shops uniquely not be subject to the fates of your Borders, Blockbuster Video, and Tower Records, as digital distribution of comic book continues to grow?

Gabriel: We have a lot of savvy storeowners who know how to create a unique experience with a broad selection of materials and knowledgeable staff. If you talk to comic shop owners, especially those that are thriving, they are thriving because of the breadth of product they are offering.

Only in a comic shop can you purchase your comics, t-shirts, statues, games, DVDs, magnets, collected editions, and in the best cases, you even get to talk with the folks who run the shops and create your own comic community. That’s a unique experience that only comic shop retailers can offer. And those that provide the better experience, or find new ways to enhance and grow that experience are the ones that will prove that they will not be subject to that same aforementioned fate.

Nrama: Let's talk about digital comics in general.

Despite all the attention digital gets these days, the economics of the distribution avenue are completely foreign to comic book readers and probably most brick and mortar retailers. Some analysts have speculated the market is still tiny compared to print comics, perhaps in the low single digits. I know by policy you don't reveal sales figures, but can you provide any sort of context as to how big the market is now and how big you project it to become?

Gabriel: I've said it in a few places and people seem to like this analogy — it's like we opened up a new top 10 retailer. We're very happy with how our market is growing and see digital comics as the new newsstand.

Nrama: And on the subject of digital economics, another issue that confuses some fans is the price of digital comics. Fans perceive digital to be something of a new found market for publishers, particularly as the major publishers continue to promote digital as a compliment, and not a replacement, for print comics.

Plus, it's no secret even to the casual fan major factors in the cover price of comics is the wholesale cut that goes to comic retailers, as well as cut that goes to Diamond, and physical printing (including paper costs), as well as other costs endemic to printed comics.

So can you explain to perhaps fence sitting readers, why digital comics, which readers say you can't hold or effectively possess, are largely the same price print comics, which some fans consider expensive as is?

To play devil's advocate, couldn't digital comics be logically sold for a profit at a lower price, presuming the full cost of production and even net revenue is already written into the cover price of the print version?

And wouldn't a lower price serve to encourage growth of the digital market?

Gabriel: The thing to remember is that digital comics aren't just sent to our distributors as PDFs or tiffs or some flat file — there's a lot of development on our end, so the idea that there's no additional costs to us is inaccurate. It costs us money to put out comics digitally.

As for the pricing, we feel confident in our pricing strategy based on the results but are certainly sensitive to those who may want a cheaper option — we have two 99 cent sales each week and offer a large amount of books for $1.99.

We established our pricing pattern for digital comics over a year ago and it has worked for us, it has also worked for our retail partners across the country. We’re always looking at new ways to do things, new pricing structures, new ways to promote books, and we’ve found in our year-plus work in this field that the pricing structure we have in place now offers us the best opportunities to create exciting sales, promote print comics through free books or lowering prices at key times and announcing the price change as part of a larger program, and even create special bundles of comics at different prices, again as part of a promotional program. For many reasons that I’m not going to set down here, this has worked phenomenally well for us over the past year.

This is an evolving market — we're all learning what works and what doesn't-so as time goes on you'll see us grow along with the market. That may mean prices on the app may vary from print prices and it may not — we have to see how the market develops.

Nrama: And how about the future of a digital subscription program for new comics? That seems like another barrier that will fall eventually.

Why not now, and if not, when will consumers begins to see that?

Gabriel: We're very aware of this request and it's something we've all discussed. We couldn't put a timeline on something like this, but it's an idea we're certainly open to.

Nrama: Finally, anything else you want readers and retailers to know about Avenging Spider-Man #1, and Marvel's digital program in general.

Gabriel: We want to thank fans and retailers for their overwhelming support of Avenging Spider-Man — this is something we'd like to expand to even more books as time goes on. We just want to remind fans to redeem their codes. That's how we know you like this program and it's a great way to benefit the retailers.

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